Your home is often one of the largest investments you make in your lifetime. So, it makes sense that one of your biggest worries in a divorce might be what could happen to the house.
If you bought your home with your spouse, then it is considered marital property and subject to division. Deciding who gets the house, or how to divide it, could cause even more issues in the already stressful situation of a divorce. Collaborative law strategies could help reduce that stress. Through a collaborative divorce, you could maintain the peace and negotiate a fair decision regarding your family home.
Deciding how to divide the equity of your home can be complicated. However, it can be even more complicated if left up to Alaska courts. Divorce courts operate on equitable distribution for all property division matters. If the division of your property is left up to the court, you may not have a say in what happens to your home.
You know your family better than a judge does. Working with your spouse through a collaborative divorce allows you to have control over the future of your family home.
There are generally three options for dividing your home. Collaboration can help you decide which one is best for your family.
1. Selling the home
Through the lens of property division, the home equity matters more than the house itself. The equity includes your home’s market value, mortgage and property taxes.
One option for dividing the home equity is to put the house on the market. This option takes the physical house out of the equation and focuses solely on its financial value. If you and your spouse choose to sell your house, the most important aspect is to negotiate the fair division of any proceeds.
2. Refinancing your home
If neither of you wish to sell the house, then you must decide which spouse will remain living there. The spouse staying in the home is responsible for refinancing the mortgage to relieve the other spouse of any financial responsibility. Essentially, they buy out the other spouse’s share to be the sole owner of the house.
However, refinancing is not always an option for some families. If this is the case, collaborative law allows spouses to negotiate other assets to maintain equitable distribution. For example, if one spouse still wishes to keep the house, but cannot afford to buy out the other share, they can offer another asset of equal value to the other spouse, such as a portion of a retirement pension.
3. Delaying division
Delaying the division process of your marital home is only an option if you have young children. It is usually in the child’s best interest for them to remain in the family home, so it is possible to delay refinancing or other division approaches while children are under 18.
The decision does not have to be stressful
You and your family make memories in your home. The prospect of dividing it or deciding who will live there can be overwhelming and emotional. However, a collaborative divorce can make the decision and the division process just a little easier on your family.